Maine Revenue Services Individual Income Tax

Maine Revenue Services Individual Income Tax

IMPORTANT UPDATE

Tax Year 2020: Note the following changes relative to conformity with federal tax law changes made after December 31, 2019. If applicable, follow the form instructions below to properly file or amend your Maine return.

Unemployment Compensation ? Conformity: ? Form 1040ME, line 14 ? Form 1040ME, Schedule PTFC/STFC, line 1e or line 2a

If you have not filed your 2020 Maine individual income tax return:

First, complete your federal individual income tax return (Form 1040 or Form 1040-SR), including Schedule 1, following the instructions for completing your federal form. Federal Schedule 1, lines 7 and 8 are used for reporting unemployment compensation income and exclusion amounts. See .

Next, complete your Maine individual income tax return (Form 1040ME).

On Form 1040ME, line 14, enter your federal adjusted gross income from federal Form 1040 or Form 1040-SR, line 11. This amount will reflect the amount of unemployment compensation you received that is excluded from federal and Maine income tax.

Finally, if applicable, complete Form 1040ME, Schedule PTFC/STFC.

If you complete Schedule PTFC/STFC, lines 1a through 1e, include on line 1e the total unemployment compensation you and your spouse, if applicable, received during the year.

If you complete Schedule PTFC/STFC, lines 2a through 2d, include on line 2a the sum of the total income from federal Form 1040 for Form 1040-SR, line 9 plus the unemployment compensation included in calculating federal Form 1040 or Form 1040-SR, Schedule 1, line 8.

If you have already filed your 2020 Maine individual income tax return:

You must file an amended Maine individual income tax return based on your federal adjusted gross income that excludes the eligible amount of unemployment compensation you and your spouse, if applicable, received during the year.

If your federal return was automatically adjusted by the Internal Revenue Service for the excludable amount of unemployment compensation, you will need to obtain your updated federal adjusted gross income amount that reflects the exclusion in order to properly file an amended Maine income tax return.

Enter on Form 1040ME, line 14 the updated federal adjusted gross income amount and

complete the remainder of the Maine return following the instructions, including the updated

instructions for Schedule PTFC/STFC.

Continued on next page

Above-the-line charitable contributions: Conformity - Follow the line instructions for the forms listed below:

? Form 1040ME, Schedule NR, line 3 ? Form 1040ME, Schedule NRH, line 3 ? Form 1040ME, Worksheet B, line 12

Educational Opportunity Tax Credit:

? Work Requirement Suspended for tax years beginning in 2020: Maine residents who were employed in Maine prior to, or during, the COVID-19 pandemic and who became unemployed as a result of COVID-19 but who are still making student loan payments may claim the EOTC, to the extent otherwise qualified.

? Loan Forbearance /Deferment: For tax years beginning on or after January 1, 2020, student loan payments made by individuals in deferment or forbearance, including those subject to a federal student loan administrative forbearance pursuant to the federal Coronavirus Aid, Relief, and Economic Security ("CARES") Act or federal Executive Order, will qualify for the EOTC as long as all other eligibility criteria are met.

Your required loan amount due will be the amount that would be otherwise due but for forbearance or deferment. If the amount cannot otherwise be determined, the amount considered due will be equal to the benchmark loan payment.

See instructions for the 2020 Educational Opportunity Tax Credit Worksheet, Loan Payment Schedule, Column B.

Credit for Tax Paid to Another Jurisdiction: For tax years beginning in 2020, a Maine resident who began teleworking in Maine due to the COVID-19 pandemic and who was performing the same services from a location outside of Maine immediately prior to the COVID-19 state of emergency declared by the Governor, or declared by the jurisdiction where the employee was performing the services, is allowed to claim the tax credit for income tax paid to other jurisdictions to the extent that:

? the services were performed during 2020 during the state of emergency period; ? the other jurisdiction is asserting the income is sourced to that jurisdiction; and ? the employee does not qualify for an income tax credit in that jurisdiction for income taxes

paid as a result of the compensation.

See instructions for the Credit for Income Tax Paid to Other Jurisdiction Worksheet for Tax Year 2020.

NOTE: The instructions you are looking for begin on the next page.

2020 MAINE

Resident, Nonresident, or Part-year Resident

Individual Income Tax Booklet

Form 1040ME

Maine FastFile

Electronic filing and payment services

For more information, see revenue

Free internet access is available at most local libraries in Maine. See your librarian for details about free internet access.

TAXPAYER ASSISTANCE and FORMS

Visit revenue to obtain the latest tax updates, view frequently asked questions (FAQs), pay your tax, or email tax-related questions.

To download or request forms or other information: Visit revenue/tax-return-forms or call (207) 6247894 - Every day 24 Hours.

TTY (hearing-impaired only): 711 - Weekdays 9:00 a.m.- 12:00 p.m.

Form PTFC/STFC questions: call (207) 624-9784 Weekdays 9:00 a.m. - 12 p.m.

Get refund status: Visit revenue or call (207) 624-9784 - Weekdays 9:00 a.m.- 12:00 p.m.

Income Tax Assistance: (207) 626-8475 - Weekdays 9:00 a.m.- 12:00 p.m.

Collection problems and payment plans: (207) 621-4300 - Weekdays 8:00 a.m.- 5:00 p.m. Call this number if you have a tax balance due that you would like to resolve.

Tax violations hot line: (207) 624-9600 - Call this number or send an email to MRS.TAXTIP@ to report possible tax violations including failure to file tax returns, failure to report all income and failure to register for tax filing.

Federal income tax information and forms: Call the Internal Revenue Service at (800) 829-1040 or visit .

Form 1040ME due date: Thursday, April 15, 2021

Printed Under Appropriation 010 18F 0002.07

MAINE REVENUE SERVICES P.O. BOX 1060 AUGUSTA, ME 04332-1060

IMPORTANT CHANGES for 2020

Reporting use tax on income tax return. 36 M.R.S. ?1861-A. For tax years beginning on or after January 1, 2020, the requirement that a tax table be used to calculate use tax reportable on individual income tax returns is repealed. However, taxpayers may continue to report unpaid use tax liability on Maine individual income tax returns. For taxable items having a sales price no greater than $1,000, the use tax may be estimated by multiplying Maine adjusted gross income by .04%. For items with a sales price greater than $1,000 but no more than $5,000, the actual unpaid use tax liability for each taxable purchase must be reported. Use tax on items that cost more than $5,000 must be reported on an individual use tax return by the 15th day of the month following the purchase.

ABLE savings account subtraction modification. 36 M.R.S. ? 5122(2) (QQ). For tax years beginning on or after January 1, 2020, earnings on funds held in a qualified Achieving a Better Life Experience (ABLE) account are deductible in calculating Maine taxable income.

Bonus depreciation / Maine capital investment credit. 36 M.R.S. ?? 5122(2)(RR) and 5219-NN. For property placed in service during a tax year beginning on or after January 1, 2020, the bonus depreciation addition modification with respect to property for which the Maine capital investment credit is claimed (36 M.R.S. ? 5122(1)(KK)(1)) may be recaptured in future tax years over the life of the asset. Thus, affected property may, for Maine tax purposes, qualify for both regular depreciation and the Maine capital investment credit.

Student loan payment subtraction modification. 36 M.R.S. ? 5122(2) (SS). For tax years beginning on or after January 1, 2020, a qualified health care employee (generally, an individual who is licensed as a registered nurse, practical nurse, osteopathic physician, or to practice medicine or surgery and is employed by a hospital in Maine) may claim, to the extent included in the employee's federal adjusted gross income, the income subtraction modification for student loan payments made by an employer directly to the lender. The modification may not be claimed for any loan payment amounts subtracted under 36 M.R.S. ? 5122(2) (FF).

Standard deduction amount. 36 M.R.S. ? 5124-C(1-A). For tax years beginning on or after January 1, 2020, the Maine standard deduction is equal to the federal standard deduction amount, subject to the Maine phase-out. Previously, the Maine standard deduction was limited to the federal standard deduction amount determined under Internal Revenue Code, Section 63 and did not include any additional federal standard deduction amount contained in other provisions of federal law.

Personal exemption. 36 M.R.S. ? 5126-A(1). For tax years beginning on or after January 1, 2020, a married taxpayer may claim a Maine personal exemption deduction for that taxpayer's spouse when not filing a joint return as long as the spouse has no gross income during the taxable year and, notwithstanding the temporary suspension of the federal personal exemption deduction through 2025, a personal exemption deduction would be allowed for the spouse for federal income tax purposes.

Property tax fairness credit. 36 M.R.S. ? 5219-KK. For tax years beginning on or after January 1, 2020, the property tax fairness credit is increased to 100% of the benefit base that is greater than 5% (previously 6%) of the individual's income, up to $750 ($1,200 for individuals 65 years of age or older).

Earned income credit. 36 M.R.S. ?5219-S. For tax years beginning on or after January 1, 2020, the Maine earned income credit is increased from 5% to 12% of the federal earned income tax credit (25% for eligible individuals who do not have a qualifying child). The credit is also extended to individuals who are 18 to 24 years of age, have no qualifying children, and are otherwise qualified for the federal earned income tax credit.

Maine capital investment credit. 36 M.R.S. ? 5219-NN. For property placed in service in Maine during a tax year beginning on or after January 1, 2020, the Maine capital investment credit is reduced to 1.2% of the bonus depreciation addition modification required with respect to that property under 36 M.R.S. ? 5122(1)(KK)(1). See discussion above regarding the recapture of the bonus depreciation addition modification in future tax years.

Maine Children's Cancer Research Fund. 36 M.R.S. ?? 5283-A and 5292. For tax years beginning on or after January 1, 2020, a new voluntary contribution check-off is added to the Maine individual income tax form, Schedule CP, for the Maine Children's Cancer Research Fund. The purpose of the fund is to provide grants and other funding to support children's cancer research provided by research facilities in Maine that operate children's cancer programs.

Excess business losses for noncorporate taxpayers. Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, the effective date for the limitation on noncorporate excess business losses was deferred to tax years beginning after December 31, 2020. For Maine income tax purposes, an adjustment must be made to reverse the effect of noncorporate excess business losses used to reduce federal adjusted gross income. The amount of excess business loss disallowed for Maine tax purposes may be carried forward to subsequent tax years to the extent the carryforward amount has not been previously used to offset Maine taxable income. See Schedule 1S, line 11, and related instructions.

Business interest deduction exceeding 30% of federal adjusted taxable income. The federal CARES Act increases the allowable business interest deduction from 30% to 50% of federal adjusted taxable income. For Maine income tax purposes, business interest greater than 30% of federal adjusted taxable income may not be used to reduce Maine taxable income. This amount required to be added back may be subtracted in future years.

See the complete 2020 Summary of Tax Law Changes available at revenue/publications/rules.

MAINE REVENUE SERVICES MISSION STATEMENT

The mission of Maine Revenue Services is to fairly and efficiently administer the tax laws of the State of Maine, while maintaining the highest degree of integrity and professionalism.

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GENERAL INSTRUCTIONS

Name, address, etc., start on the left; dollar amounts start from the right.

Who must file? A Maine income tax return must be filed by April 15, 2021 if you are a resident of Maine who is required to file a federal income tax return or if you are not required to file a federal return, but do have income subject to Maine income tax resulting in a Maine income tax liability. Even if you are required to file a federal income tax return, you do not have to file a Maine income tax return if you have no addition income modifications (Form 1040ME, Schedule 1A, line 13) and your income subject to Maine income tax is less than the sum of your Maine standard deduction amount plus your personal exemption amount. However, you must file a return to claim any refund due to you. Generally, if you are a nonresident or a "Safe Harbor" resident who has income from Maine sources resulting in a Maine income tax liability, you must file a Maine income tax return. See below for more information on residency, including "Safe Harbors." Nonresidents - see Schedule NR instructions for minimum taxability thresholds. Also see, 36 M.R.S. ? 5142(8-B) and Rule 806.

For additional answers to frequently asked questions (FAQs), visit revenue/faq.

What is my Residence Status?

To determine your residency status for 2020, read the following.

Domicile: Domicile is the place an individual establishes as his or her permanent home and includes the place to which he or she intends to return after any period of absence. A number of factors associated with residency are relevant in the evaluation of a claimed domicile. A domicile, once established, continues until a new, fixed and permanent home is acquired. To change domicile, a taxpayer must exhibit actions consistent with a change. No change of domicile results from moving to a new location if the intent is to remain only for a limited time, even if it is for a relatively long duration.

? Full-Year Resident: 1) Maine was my domicile for the entire year of 2020; or 2) I maintained a permanent place of abode in Maine for the entire year and spent a total of more than 183 days in Maine.

? "Safe Harbor" Resident (treated as a nonresident):

General Safe Harbor - Maine was my domicile in 2020, I did not maintain a permanent place of abode in Maine, I maintained a permanent place of abode outside Maine and I spent no more than 30 days of 2020 in Maine. Individuals qualifying under the safe harbor rule will be treated as a nonresident for Maine individual income tax purposes. File Form 1040ME and Schedule NR or NRH.

Foreign Safe Harbor - I spent at least 450 days in a foreign country during any 548-day period occurring partially or fully in the tax year. The taxpayer must also meet other eligibility criteria. If you qualify for the Foreign Safe Harbor, you will be considered a "Safe Harbor" Resident and treated as a nonresident for the 548-day period even though you were domiciled in Maine.

? Part-year Resident: I was domiciled in Maine for part of the year and was not a full-year resident as defined in 2) above. File Form 1040ME and Schedule NR or NRH.

? Nonresident: I was not a resident or part-year resident in 2020, but I do have Maine-source income. Follow the federal filing requirements for filing status, federal adjusted gross income, and standard or itemized deductions. File Form 1040ME and Schedule NR or NRH.

For additional information on determining Maine residency or if you are in the military, see the Maine Revenue Services Guidance to Residency Status and Guidance to Residency "Safe Harbors" available at revenue/tax-return-forms (click on Income Tax Guidance Documents) or call the forms line at (207) 624-7894.

SPECIFIC INSTRUCTIONS -- FORM 1040ME Note: Form 1040ME is designed to comply with optical scanning requirements. Fill in the white boxes carefully in black or blue ink. Letters and numbers must be entered legibly within the outline area. Letters must be in upper case only.

Round down to the next lower dollar any amount less than 50 cents. Round up to the next higher dollar any amount 50 cents or more. Do not enter dollar signs, commas, or decimals. Due to scanning requirements, only original forms and schedules may be submitted.

Print or type your name(s) and current mailing address in the spaces provided. Social security number(s): You must enter your social security number(s) in the spaces provided.

Check the box above your social security number if this is an amended return. You must file an amended Maine income tax return if (1) you have filed an amended federal income tax return that affects your Maine income tax liability; (2) the Internal Revenue Service has made a change or correction to your federal income tax return that affects your Maine income tax liability; or (3) an error has been made in the filing of your original Maine income tax return. For more information, see the frequently asked questions at revenue/faq.

Line A. Maine Property Tax Fairness Credit / Sales Tax Fairness Credit for Maine residents and part-year residents only. See Schedule PTFC/STFC. Check the box on line A only if you are claiming the Property Tax Fairness Credit on line 25d and/or the Sales Tax Fairness Credit on line 25e AND you are completing Form 1040ME in accordance with the instructions in Step 1 of Schedule PTFC/STFC. Otherwise, leave the box blank. See the Schedule PTFC/STFC instructions for Step 1. Note: Schedule PTFC/STFC is available at revenue/ tax-return-forms or call the forms line at (207) 624-7894.

Line 1. FOR MAINE RESIDENTS ONLY. The Maine Clean Election Fund finances the election campaign of certified Maine Clean Election Act candidates. Checking this box does not increase your tax or reduce your refund but reduces General Fund revenue by the same amount.

Line 2. Check if at least two-thirds of your gross income for 2020 was from commercial farming or fishing as defined by the Internal Revenue Code. Include your spouse's income in your calculation if you are filing a joint return.

Lines 3-7. Use the filing status from your federal income tax return. If you filed a married filing jointly federal return and one spouse is a part-year resident, nonresident or "Safe Harbor" resident, see the Guidance Documents for Schedule NR and Schedule NRH available at revenue/tax-return-forms (click on Income Tax Guidance Documents). If you are filing married filing separately, be sure to include your spouse's name and social security number. For pass-through entities only: check the box below line 7 if this is a composite filing. A composite return may be filed by a pass-through entity on behalf of nonresident owners. You must complete and enclose Schedule 1040CME and supporting documentation with your composite return. For more information on composite filing and forms, visit revenue.

Lines 8-11a. See the General Instructions above to determine your residency status. Nonresident aliens: check box 11 if you were a nonresident of Maine or box 11a if you were a resident of Maine during all or part of the tax year. If you check box 8a, 9, 10, 11, or 11a, enclose a copy of your federal tax return.

Schedule NRH is available at revenue/tax-return-forms or call (207) 624-7894 to order.

Line 13. Personal exemptions. Enter "1" if filing single, head-ofhousehold, qualifying widow(er) or married filing separately. Except, enter "2" if you are married, not filing a joint return, and would claim a federal personal exemption deduction for your spouse if not for the temporary suspension of the federal personal exemption deduction. Enter "2" if married filing jointly. Except, enter "0" if you (or, if married filing jointly, both you and your spouse) may be claimed as a dependent on another person's return. If you are married filing jointly and only one spouse may be claimed as a dependent on another person's return, enter "1".

Line 13a. Enter the number of qualifying children and dependents for whom you are able to claim the federal child tax credit or the credit for other dependents (from federal Form 1040 or Form 1040-SR, "Dependents," columns (1) through (4)). Also see Form 1040ME, Schedule A, line 8.

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Line 14. Enter the federal adjusted gross income shown on your federal Form 1040, line 11 or Form 1040-SR, line 11. Note: If you are filing Form 1040ME in accordance with the Step 1 instructions for Schedule PTFC/ STFC and check the box on line A, skip line 14.

Line 15a. Income Modifications - Additions. Complete Maine Schedule 1A to calculate your entry for this line.

Line 15b. Income Modifications - Subtractions. Complete Maine Schedule 1S to calculate your entry for this line.

Part-year residents, Nonresidents and "Safe Harbor" residents, see Schedule NR or NRH. Note: If you are filing Form 1040ME in accordance with the Step 1 instructions for Schedule PTFC/STFC and check the box on line A, skip lines 15a and 15b.

Line 17. Deduction. CAUTION: If the amount on Form 1040ME, line 16 is more than $82,900 if single or married filing separately; $124,350 if head of household; or $165,800 if married filing jointly or qualifying widow(er), you must complete the Worksheet for Standard/Itemized Deductions below to calculate your deduction amount for line 17.

If your income does not exceed the amount for your filing status and you use the standard deduction on your federal return, enter the amount from federal Form 1040, line 12 or Form 1040-SR, line 12 for your filing status.

If you itemized deductions on your federal return, complete Form 1040ME, Schedule 2. If the amount on Schedule 2, line 7 is less than your allowable standard deduction, use the standard deduction, except, if you are filing as a nonresident alien, you must use itemized deductions.

Worksheet for Standard / Itemized Deductions (for Form 1040ME, line 17)

Use this worksheet to calculate your standard deduction or itemized deduction if your Maine adjusted gross income for 2020 is greater than $82,900 if single or married filing separately; $124,350 if head of household; or $165,800 if married filing jointly or qualifying widow(er).

1. Enter your 2020 Maine adjusted gross income (Form 1040ME, line 16) ................................................................. 1 ____________________

2. Enter $82,900 if single or married filing separately; $124,350 if head of household; or .......................................... 2 ____________________ $165,800 if married filing jointly or qualifying widow(er).

3. Subtract line 2 from line 1. If zero or less, STOP here. Your deduction is not limited .............................................. 3 ____________________

4. Enter $75,000 if single or married filing separately; $112,500 if head of household; or........................................... 4 ____________________ $150,000 if married filing jointly or qualifying widow(er).

5. Divide line 3 by line 4. If one or more, enter 1.0000................................................................................................. 5 __ . __ __ __ __

6. Enter your 2020 standard deduction. (See federal Form 1040, line 12 or Form 1040-SR, line 12) or your 2020 Maine itemized deductions from Form 1040ME, Schedule 2, line 7, whichever applies ................................ 6 ____________________

7. Multiply line 6 by line 5 ............................................................................................................................................. 7 ____________________

8. 2020 Maine itemized deductions or standard deduction. Subtract line 7 from line 6. Enter this amount on Form 1040ME, line 17 ......................................................................................................................................... 8 ____________________

Line 18. Exemption. Multiply the amount shown on line 13 by $4,300. CAUTION: If the amount on Form 1040ME, line 16 is more than $276,350 if filing single; $304,000 if head of household; $331,600 if married filing

jointly or qualifying widow(er); or $165,800 if married filing separately, you must complete the Worksheet for Phaseout of Personal Exemption Deduction Amount below to calculate your exemption amount for line 18.

Worksheet for Phaseout of Personal Exemption Deduction Amount (for Form 1040ME, line 18)

Use this worksheet to calculate your personal exemption amount if your Maine adjusted gross income for 2020 is greater than $276,350 if single; $304,000 if head of household; $331,600 if married filing jointly or qualifying widow(er); or $165,800 if married filing separately.

1. Enter your 2020 Maine adjusted gross income (Form 1040ME, line 16) ................................................................. 1 ____________________

2. Enter $276,350 if single; $304,000 if head of household; $331,600 if married filing jointly or qualifying widow(er), or $165,800 if married filing separately................................................................................................... 2 ____________________

3. Subtract line 2 from line 1. If zero or less, STOP here. Your personal exemption deduction amount is not limited... 3 ____________________

4. Enter $62,500 if married filing separately; $125,000 if single or married filing jointly or qualifying widow(er) or head of household.................................................................................................................................................... 4 ____________________

5. Divide line 3 by line 4. If one or more, enter 1.0000................................................................................................. 5 __ . __ __ __ __

6. Enter the 2020 personal exemption deduction amount (multiply the amount on Form 1040ME, line 13 by $4,300) ..................................................................................................................................................................... 6 ____________________

7. Multiply line 6 by line 5 ............................................................................................................................................. 7 ____________________

8. 2020 Maine personal exemption deduction amount. Subtract line 7 from line 6. Enter this amount on Form 1040ME, line 18 .............................................................................................................................................. 8 ____________________

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Line 20a. Enter the amount of credits previously used to reduce Maine income tax that are now subject to recapture. Enclose supporting documentation or applicable worksheet(s) to show the calculation of the amount entered on this line.

Line 21. Note: Schedules NR and NRH are available at maine. gov/revenue/tax-return-forms or call the forms line at (207) 624-7894.

Line 24. Subtract line 23 from line 22. Nonresidents and "Safe Harbor" Residents only: Note that unused business credits claimed on Schedule A, lines 13 and 15 through 20 may be eligible to be carried over to future tax years. See the instructions for Maine Schedule A.

Line 25a. Enter the total amount of Maine income tax withheld. Enclose (do not staple or tape) supporting W-2, 1099 and 1099ME forms. Unless the 1099 form is required as supporting documentation for another schedule or worksheet, send 1099 forms only if there is State of Maine income tax withheld shown on them.

Line 25b. Enter the total amount of Maine estimated tax paid for tax year 2020. Also include on this line extension payments and amounts withheld for 2020 on the sale of real estate in Maine (enclose a copy of Form REW-1 to support your entry). If you are filing an amended return, include amounts paid with your original, or previously adjusted return, including use tax, voluntary contributions and estimated tax penalty amounts.

Line 25d. For Maine residents and part-year residents only. Enter the amount from Schedule PTFC/STFC, line 12.

Line 25e. For Maine residents and part-year residents only. Enter the amount from Schedule PTFC/STFC, line 13 or line 13a, whichever applies.

Line 26. If you are filing an amended return, include any carryforward or refund amount allowed on the original, or previously adjusted return.

Line 29. If the amount on line 27 is a negative amount, treat it as a positive amount and add it to the amount on line 24.

Note: For purposes of calculating Form 1040ME, lines 28 and 29, any negative amount entered on Form 1040ME, line 24 should be treated as zero.

Line 30. If you purchased items for use in Maine from retailers who did not collect the Maine sales tax (such as businesses in other states or countries and unregistered mail order and internet sellers), you may owe Maine use tax on those items. The tax rate for purchases in 2020 is 5.5%. If you paid another state's sales or use tax on any purchase, that amount may be credited against the Maine use tax due on that purchase. If you do not know the exact amount of Maine use tax that you owe, multiply your Maine adjusted gross income from line 16 by .04% (.0004).

Note: For items that cost $1,000 or more, you must add the tax on those items to the percentage amount. Use tax on items that cost more than $5,000 must be reported on an individual use tax return by the 15th day of the month following its purchase. For additional information, visit revenue/taxes/sales-use-service-provider-tax or call (207) 624-9693.

Line 30a. If you collected $2,000 or less in sales tax on casual rentals of living quarters, you may report the tax on this line. Enter the amount of tax collected on rentals made in 2020 not already reported on a sales tax return. The tax rate on casual rentals occurring during 2020 is 9%.

Note: To report sales tax greater than $2,000, you must file a sales/use tax return at . If you do not have internet access, call (207) 624-9693 for assistance.

Line 33b. Refunds of $1.00 or more will be issued to you.

Lines 33c-33e. To comply with banking rules, you must check the box to the left of line 33d if your refund is going to an account outside the United States.

If you check the box, we will mail you a paper check. The account to receive the direct deposit must be in your name. If you are married, the account can be in either spouse's name or both spouses' names. Note that some banks will not allow a joint refund to be deposited into an individual account.

Line 33c. Routing Number ("RTN") must be 9 digits.

Line 33d. Bank Account Number can be up to 17 characters (both numbers and letters). Omit hyphens, spaces and special symbols. Enter the number from left to right.

Line 34b. Underpayment Penalty. If line 24 less the sum of lines 25a, 25c, 25d, 25e, and REW amounts included in line 25b is $1,000 or more, use Form 2210ME to see if you owe an underpayment of estimated tax penalty. Form 2210ME is available at revenue/tax-returnforms or call (207) 624-7894.

Line 34c. Total Amount Due. Do not send cash. If you owe less than $1.00, do not pay it. Remit your payment using Maine EZ Pay at revenue or enclose (do not staple or tape) a check or money order payable to Treasurer, State of Maine with your return. Include your complete name, address and telephone number on your check or money order.

Third Party Designee. Complete this section if you would like to allow Maine Revenue Services to call or accept information from another person to discuss your 2020 Maine individual income tax return. Choose any 5-digit PIN which will be used to ensure MRS employees speak with only the individual you have designated. This authorization will automatically end on April 15, 2022.

Payment Plan. Check the box below your signature(s) if you are requesting a payment plan. Your first payment should be submitted with your return and you should continue to make payments until Maine Revenue Services contacts you. For more information, call (207) 6214300 or email compliance.tax@.

Injured or Innocent Spouse. Check the box below your signature(s) if you are an injured or innocent spouse for a Maine Revenue Services income tax debt only. (See federal Form 8379 or Form 8857 and related instructions.) If you have a married joint refund which may be set off to a State agency including DHHS, you must submit your claim form directly to that agency. For more information, call (207) 624-9595 or email compliance.tax@.

SCHEDULE 1A -- ADDITION INCOME MODIFICATIONS - See page 19

For more information on Maine income modifications, visit revenue/tax-return-forms.

Also include the taxpayer's distributive share of addition modification Line 3. Enter 2020 Maine Public Employees Retirement System items from partnerships, S corporations and other pass-through entities. contributions. See your Maine state or municipal W-2 form.

Line 1. Enter the income from municipal and state bonds, other than Maine, that is not included in your federal adjusted gross income (i.e., enter bond interest from City of New York but not Portland, Maine).

Line 2. Net operating loss recovery adjustment. Enter on this line any amount of federal net operating loss carry forward that has been previously used to offset Maine addition modifications. For more information, go to revenue/tax-return-forms (select Income Tax Guidance Documents).

Lines 4 and 5. Bonus depreciation add-back. Lines 4 and 5 relate to Maine's decoupling from the federal special depreciation deduction through IRC ? 168(k), commonly known as bonus depreciation. To calculate the amount to enter on these lines, complete a pro forma federal Form 4562 as if no bonus depreciation was claimed on the property placed in service in tax year 2020.

The total addition modification is the difference between the federal depreciation claimed on Form 4562 and the depreciation calculated on

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the pro forma Form 4562. If any of the property placed in service in tax year 2020 is located in Maine and the Maine capital investment credit is claimed, the total addition modification must be divided between lines 4 and 5. Otherwise, the entire addition must be entered on line 4. Enclose copies of the original and pro forma federal Forms 4562, along with the add-back calculation, with the return.

For more information, go to revenue/tax-return-forms (select Income Tax Guidance Documents). Also, refer to the instructions for Schedule 1S, line 9 below.

Line 4. Bonus depreciation add-back: Enter on this line the total bonus depreciation add-back calculated above less the amount of Maine capital investment credit add-back from line 5. Amounts entered on this line are eligible for the recapture subtraction modification on Schedule 1S, line 9 in future years.

Line 5. Maine capital investment credit bonus depreciation addback: The Maine capital investment credit is available to businesses that place depreciable property in service in Maine during the taxable year beginning in 2020.

Enter on this line the portion of the bonus depreciation add-back calculated above relating to property for which the Maine capital investment credit is claimed, based on original basis of property placed in service in tax year 2020. For example, if you purchased $400,000 of eligible property and $100,000 of that property is located in Maine and included in the credit base, the portion of the add-back to include on this line is $100,000/$400,000 or 25% of the total bonus depreciation add-back calculated above.

Property that is transferred out of state or disposed of within 12 months after being placed in service in Maine is not eligible for the Maine capital investment credit. Amounts entered on this line are eligible for the recapture subtraction modification on Schedule 1S, line 9 in future years.

Line 6. Enter your share of a fiduciary adjustment (addition modifications) relating to income from an estate or trust (36 M.R.S. ? 5122(3)). Attach a copy of your federal Schedule K-1.

Line 7. Election to recognize total gain from the sale of Maine real or tangible property ? nonresidents only. Nonresident individuals may elect to recognize the entire gain from an installment sale during the taxable year of real or tangible property located in Maine. The election may only be made on a timely filed original return and, once made, is irrevocable. Enter on this line the total gain from the sale of the Maine property that would have been included in your federal adjusted gross income if you had not reported the gain on the installment sale basis, less the amount of the gain from the sale already included in your federal adjusted gross income reported on Form 1040ME, line 14. An entry on this line constitutes an election under this paragraph.

Line 8. Adjustment for loss, deductions and other expenses of a pass-through entity financial institution subject to Maine franchise tax. Under Maine law, financial institutions are subject to the Maine franchise tax, regardless of how the institution is organized. This includes a financial institution organized as a pass-through entity, such as a partnership or limited liability company. Maine law provides that the income from an ownership share in a pass-through entity financial institution is not taxable income on the owner's Maine income tax return. In like manner, any loss, deduction or expense of a pass-through entity financial institution reflected in an owner's federal income is not permitted in calculating the Maine taxable income of the owner. (36 M.R.S. ? 5122(1)(K)).

Line 9. Wellness programs tax credit adjustment. Maine taxpayers who claim the Maine credit for wellness programs under 36 M.R.S. ? 5219-FF and deducted related expenses on their federal tax return must increase Maine taxable income by the amount federal income was reduced. (36 M.R.S. ? 5122(1)(EE)).

Line 10. Excess business losses for noncorporate taxpayers. Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, the effective date for the limitation on noncorporate excess business losses was deferred to tax years beginning after December 31, 2020. For Maine income tax purposes, an adjustment must be made to reverse the effect of noncorporate excess business losses used to reduce federal adjusted gross income. To calculate this amount, complete a pro forma federal Form 461 (use the 2019 federal Form 461, except substitute $259,000 ($518,000 if married filing jointly) for $255,000 ($510,000 if married filing jointly) on line 15). If the federal pro forma Form 461, line 16 is negative, enter the amount as a positive number on this line. If the federal pro forma Form 461, line 16 is positive, enter zero on this line. The amount of excess business loss disallowed for Maine tax purposes may be carried forward to subsequent tax years to the extent the carryforward amount has not been previously used to offset Maine taxable income. See Form 1040ME, Schedule 1S, Income Subtractions, Line 11, and related instructions.

Line 11. Business interest deduction exceeding 30% of federal adjusted taxable income. The federal CARES Act increases the allowable business interest deduction from 30% to 50% of federal adjusted taxable income. For Maine income tax purposes, business interest greater than 30% of federal adjusted taxable income may not be used to reduce Maine taxable income. To calculate this amount, complete a pro forma federal Form 8990 using the 30% business interest deduction limitation. Enter the difference between the allowable interest deduction using the 50% limitation on federal Form 8990, Line 26 and the interest deduction calculated using the 30% limitation on the pro forma federal Form 8990, Line 26. Note: Do not complete this line if the federal business interest expense deduction does not exceed 30% of federal adjusted taxable income.

Line 12. Reserved.

SCHEDULE 1S -- SUBTRACTION INCOME MODIFICATIONS - See pages 21 and 22 For more information on Maine income modifications, visit revenue/tax-return-forms.

Also include the taxpayer's distributive share of subtraction modification items from partnerships, S corporations and other pass-through entities. If you are a resident of Maine and have income taxed by another state, you may be eligible for the Credit for Income Tax Paid to Other Jurisdictions. See Form 1040ME, Schedule A, line 12.

Line 1. If included in federal adjusted gross income, enter income from direct obligations of the U.S. Government, such as Series EE and Series HH Savings bonds and U.S. Treasury bills and notes.

Line 2. Enter the amount of any state or local income tax refund included on federal Form 1040 or 1040-SR, Schedule 1, line 1.

Line 3. If included in federal adjusted gross income, enter the taxable amount of social security benefits issued by the U.S. Government and railroad retirement benefits (tier 1 and tier 2) and unemployment and sick benefits issued by the U.S. Railroad Retirement Board.

Line 4. Enter the pension income deduction from the Worksheet for Pension Income Deduction, line 7. Include copies of your 1099 forms to verify the subtraction.

Line 5. Non-Maine active duty military pay received by a Maine resident and military compensation received by a nonresident of Maine.

Maine residents - If included in federal adjusted gross income and not otherwise removed from Maine income, enter the amount of military pay earned during the portion of the taxable year that you were a Maine resident for service performed outside of Maine in compliance with written military orders.

Military pay is compensation for: (1) active duty service in the active components of the United States Army, Navy, Air Force, Marines or Coast Guard if your permanent duty station during the performance of such service was located outside of Maine; OR (2) active duty service in

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